Mergers and Acquisitions, MSP, Content

Thoma Bravo Acquires Continuum: What It Means for MSPs

New VeriShip CEO Michael George
Continuum CEO Michael George

Thoma Bravo has acquired Continuum from Summit Partners, the private equity firms have confirmed. The deal is a potential win for Continuum and MSPs that are seeking to automate a range of outsourced IT services. Financial terms were not disclosed.

> Related: Read all of our coverage about Thoma Bravo acquiring Continuum

Reached by ChannelE2E, Continuum CEO Michael George says he and his management team are well-prepared for the company's next stage of growth. Continuum is now part of Thoma Bravo's Discover Fund -- a growth-oriented fund. While some private equity funds (i.e, value funds) look to slash a business's costs to inflate EBITDA, Thoma Bravo's Discover Fund is all about investing for growth. Translation: Continuum is likely in the market to make more acquisitions while also focusing on organic growth.

George praised former Continuum owner Summit Partners for that PE firm's consistent support of the business since 2011. The new deal with Thoma Bravo positions Continuum for its next stage of growth rather than a shift in strategy, George tells ChannelE2E. "I'm in it for the long haul," George says. "And our management team has grabbed the baton for the next stage of our growth."

Thoma Bravo Acquires Continuum: What It Means for MSPs

Continuum specializes in RMM (remote monitoring and management), BDR (backup and disaster recovery) and NOC (network operations center) services. A SOC (security operations center) has also entered beta testing, George confirmed to ChannelE2E. The company manages more than 1 million endpoints for its 5,800 partners, including MSPs servicing more than 60,000 SMB customers, the company indicated.

On the one hand, Continuum specializes in MSP software -- typically competing against Autotask, ConnectWise, Kaseya and SolarWinds MSP on some fronts. But on the other hand, the company's business model differs from potential MSP software rivals.

George explains it this way: "The greatest cost MSPs must manage is their own payroll. It begs the question: How do MSPs find talent and train talent as the IT technology landscape continues to change so rapidly? We solve for that."

Indeed, MSPs essentially outsource many support services to Continuum, which allows the MSPs to focus on sales and marketing rather than technical talent acquisition, training and re-training.

Continuum Impresses Thoma Bravo

AJ Jangalapalli
AJ Rohde

Those metrics and Continuum's business model impressed Thoma Bravo's management team. According to Thoma Bravo Partner A.J. Rohde:

“Continuum sets the industry standard with its turn-key approach in the Remote Monitoring and Management (RMM) market for MSPs. We know this market well, and have followed the company for a long time. What Michael George and his team have delivered on in terms of an innovative product suite and full software and services model has been very impressive, and we can’t wait to work with them to accelerate the world-class offering they deliver to MSPs, both organically and through add-on acquisitions.”

Added Thoma Bravo VP AJ Jangalapalli:

“The company has a smart and proven business model which solves a well-understood skills gap in the MSP market. With its strong growth and high customer retention, Continuum is a great fit with the Thoma Bravo portfolio.”

Continuum's MSP Industry History

Continuum has evolved dramatically since 2011. At the time, Summit Partners (another private equity firm) acquired certain assets from Zenith Infotech, and those assets were later rebranded as Continuum. Summit installed Michael George as Continuum's CEO when that 2011 deal was announced.

Continuum's first few months in business were particularly challenging. At the time, some MSP partners alleged that the company's software and NOC services were somewhat neglected under former ownership. George and the new Continuum management team quickly overhauled R&D and partner communications. The net result was predictable upgrades that got the company's NOC, help desk and RRM services back on track.

By 2014, Continuum acquired R1Soft, a commercial backup platform for MSPs, CSPs and web hosting providers. At the same time, George continued to evolve Continuum's executive team for the next stage of growth.

Continuum Today... And Tomorrow

Continuum has grown significantly in recent years, expanding from roughly 400 employees in 2011 to roughly 1,400 today. Moreover, the company had only about 40 U.S.-based employees roughly five years ago. Today's U.S.-based employment figures are are about 100 in Boston, 250 in Pittsburgh and 50 in Houston. Hundreds of employees are located across the United Kingdom, India, Australia and more.

Thoma Bravo's acquisition of Continuum shouldn't come as a major surprise to MSPs, George says. After all, Summit owned the company for more than five years, and the typical private equity ownership window is roughly five to seven years, he adds.

Now, that five- to seven-year clock restarts under Thoma Bravo's ownership. George and his management team say they're prepared to leverage Thoma Bravo's support to drive even more growth in the MSP sector.

Continuum Challenges and Opportunities

Still, the company faces some potential challenges. As a whole, Continuum's services (RMM, BDR, NOC, help desk and forthcoming SOC services) are tightly integrated with one another. The goal is to provide MSPs with a complete, seamless experience from one service to the next, while allowing Continuum to manage all of those services on behalf of the partner -- without disrupting the partner-customer relationship.

However, Continuum's core rivals -- to reiterate, Autotask, ConnectWise, Kaseya and SolarWinds MSP -- also claim to be growing rapidly. Moreover, upstarts like Atera and Pulseway are striving to muscle their way into the MSP software market.

At the same time, Continuum and its core rivals must face potential market shifts -- including the rise of APM (application performance monitoring) and infrastructure monitoring tools from the likes of AppDynamics, Datadog and New Relic. While those players don't compete head-on against Continuum, they provide potential examples for how future cloud and on-premises workloads could be managed.

As more and more workloads shift from on-premises SMB servers toward cloud systems, Continuum may need to respond accordingly. Among the steps in that direction: The company is expected to more fully discuss its SOC (security operations center) strategy during the Continuum Navigate 2017 conference, which is set for October.

In the meantime, Michael George sees plenty of upside for Continuum, MSPs and the company's new owner.

Joe Panettieri

Joe Panettieri is co-founder & editorial director of MSSP Alert and ChannelE2E, the two leading news & analysis sites for managed service providers in the cybersecurity market.